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Dan Clemmensen

Revenue, not (just) price

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With the name "" I guess it's inevitable, but the articles very often discuss "price" when the real issue is revenue. For example:

Producers have a revenue problem, not a "price" problem. Although the reporter uses the term "price", the KSA official is quoted as referring to revenue. Sure, the price is a big deal, but gross revenue depends on both price and amount of goods sold. Even if the price of oil magically went back up to $60/bbl, Revenue would currently still be very low relative to pre-pandemic levels, because consumption is so low. Production will continue to be very low until consumption resumes and remain low until the storage glut is cleared, regardless of the price. In the real world, this will also keep prices low, which compounds the effect on revenue.

Edited by Dan Clemmensen

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